Four Different Management Companies in Five Years?

Aug. 25, 2015 — My lawyer said there have been four different management companies over a five-year period at the building we are looking at. Should we worry?

If there is a constant turnover of management companies, one needs to look at the reasons why the property has changed hands so frequently. If the board is making poor choices regarding the management company it hires, prospective purchasers should probably be concerned about the board. Poor decision-making can have a negative impact in building operations and diminish shareholder values.

You should know that over the past 10 years, there has been a significant amount of consolidation in the management industry and many management companies have disappeared as they have been taken over by larger companies. You may want to find out if this has been the case in the building you are interested in.

Fred Rudd is president of Rudd Realty Management.